Market Works Off the Froth
05/17/07 - 05:46 PM EDT
Liz Rappaport
Beware the trader's market. The stock market took a baby step backward Thursday as it tried to find its footing amid several mixed messages.
The session followed a similar pattern lately. Traders short the market, only to find that surprises such as buyouts of Alliance Data Systems(ADS Quote - Cramer on ADS - Stock Picks) and Acxiom (ACXM Quote - Cramer on ACXM - Stock Picks) and earnings reports such as J.C. Penney's(JCP Quote - Cramer on JCP - Stock Picks) foil their plots. While the major stock market indices ended in the red Thursday, they'd been down further at the start of the day's session, come back and slipped again into the close. "The technical tools traders point to a top, and they say this rally 'has' to end, but every time the market perks up, and they just cover their shorts," says Marc Pado, chief market analyst at Cantor Fitzgerald. "They're just bleeding day after day." The Dow Jones Industrial Average slipped 0.1% to close at 13,476.72 while the S&P 500 finished down 0.9% at 1512.75, and the Nasdaq Composite closed off only 0.3% at 2539.38. Pado, who is not a permabull and had believed there would be an early May pullback, now says "a correction can't happen with what we're seeing out there," referring to buybacks and mergers-and-acquisitions activity. Thursday was chock-full of such news. Sun Microsystems(SUNW Quote - Cramer on SUNW - Stock Picks), Countrywide Financial (CFC Quote - Cramer on CFC - Stock Picks) and Warnaco Group(WRNC Quote - Cramer on WRNC - Stock Picks) announced share repurchase programs, sending their stocks up over 2% each.
RSS
